8-K: Investcorp India Acquisition Corp. Concludes Diligence for Bigtincan Merger, Eyes Nasdaq Listing

Investcorp India Acquisition Corp. has completed its diligence and negotiations to merge with Bigtincan Holdings Limited, aiming to list the combined entity on Nasdaq.

Summary

• Investcorp India Acquisition Corp. (IVCA) has finalized its diligence and negotiations with Bigtincan Holdings Limited (BTH) for a business combination.
• The proposed transaction involves exchanging all BTH shares for shares in a new Cayman Islands holding company, Bigtincan Limited (Pubco).
• The implied equity value of BTH is estimated at US$275 million, or approximately A$0.47 per BTH share, based on a fully diluted basis and an AUD/USD exchange rate of 0.69.
• Investcorp is expected to make an initial US$12.5 million equity investment into Pubco to support its Nasdaq listing.
• Following the transaction, Investcorp will own approximately 20% of Pubco's equity at an approximate cost of US$4.73 per share of Pubco common equity, which is equivalent to approximately A$0.22 per share of BTH common equity.
• A cash facility is planned for BTH shareholders holding less than 5,000 shares, offering them the option to sell their shares at approximately A$0.235 per share, a premium of about A$0.060 over the current market price of A$0.175 as of October 11, 2024.
• BTH will be delisted from the Australian Securities Exchange (ASX) and Pubco will be listed on Nasdaq.
• The transaction is subject to customary closing conditions, including shareholder and regulatory approvals.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the strategic move to Nasdaq, the implied valuation, and the investment from Investcorp. However, the risks associated with the transaction and the need for approvals temper the overall sentiment.

Positives

• The transaction offers the best value to BTH shareholders, customers, employees, and partners.
• It provides an opportunity for BTH to capitalize on its sales enablement and AI technologies.
• The deal will allow BTH to become a global leader in enterprise software.
• The cash facility provides a premium for small BTH shareholders.
• The transaction has no financing conditions.
• The transaction will bring an innovative Australian business to a listing on Nasdaq.

Negatives

• BTH will be delisted from the Australian Securities Exchange (ASX).
• The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, which could introduce delays or prevent the deal from closing.

Risks

• The ability of BTH and IVCA to sign definitive documentation on a timely basis or at all is a risk.
• There is a risk of legal proceedings related to the transaction.
• Delays or inability to obtain necessary regulatory approvals could impact the deal.
• The transaction could disrupt current plans and operations.
• There is a risk of not recognizing the anticipated benefits of the transaction.
• The transaction may not close at all.
• Changes in applicable laws or regulations could affect the deal.
• Economic, business, and competitive factors could adversely affect IVCA.
• The conflict in Russia and Ukraine and rising inflation and interest rates could cause uncertainty.
• Shareholder approval from BTH or IVCA may not be obtained.
• BTH and IVCA may not be able to satisfy the conditions to closing of the transaction.

Future Outlook

The transaction is expected to close after customary closing conditions are met, including shareholder and regulatory approvals. Pubco will continue to invest in Australia, including the potential establishment of an AI Technology Center in Tasmania.

Management Comments

• IVCA believes that the transaction offers the best value to BTH shareholders, customers, employees and partners.
• IVCA is committed to supporting Henslow and Jett Capital to find potential avenues for liquidity to BTHs current shareholders.

Industry Context

This announcement reflects a trend of companies seeking to access larger capital markets through listings on exchanges like Nasdaq. The focus on sales enablement and AI technologies aligns with current trends in enterprise software.

Comparison to Industry Standards

• The valuation of US$275 million for Bigtincan is within the range of similar SaaS companies in the sales enablement space, although specific comparables would require a deeper analysis of revenue multiples and growth rates.
• The move to list on Nasdaq is a common strategy for companies seeking higher valuations and access to a broader investor base, similar to other Australian tech companies that have pursued dual listings or outright moves to the US market.
• The 20% stake for Investcorp is a typical ownership level for a major investor in a SPAC merger, aligning with industry norms for such transactions.
• The cash facility for small shareholders is a common practice to address the needs of retail investors in such transactions, similar to other deals where small shareholders are offered a premium to exit.

Stakeholder Impact

• BTH shareholders will have the option to exchange their shares for Pubco shares or sell them through the cash facility.
• BTH employees and partners are expected to benefit from the growth opportunities of the combined entity.
• Customers will benefit from the combined entity's enhanced capabilities in sales enablement and AI technologies.
• Investcorp will become a major shareholder in Pubco.

Next Steps

• Execution of definitive agreements between IVCA and BTH.
• Obtaining IVCA shareholder approval.
• Obtaining BTH shareholder approval.
• Receiving approval from U.S. and Australian regulators.
• Delisting BTH from the ASX.
• Listing Pubco on Nasdaq.

Key Dates

Keywords

business combination, merger, acquisition, Nasdaq listing, Bigtincan Holdings, Investcorp India Acquisition Corp, equity investment, share exchange, delisting, AI technology, sales enablement